Teva Pharmaceutical Industries Ltd Case Solution

1. How does Teva compete in the generic pharmaceuticals industry? What is its competitive advantage?

Teva Pharmaceutical Industries constitute a major part of the generic pharmaceutical industry due to its innovation strategies. Since the industry’s growth rate is at 20% within the last 5 years, it means that there is a greater chance of development. 

1. Innovation

There is a greater factor of competition here with pharmaceutical research being at high risk. However, Teva Pharmaceuticals makes sure to stay ahead of all other firms with its ability to continually introduce complex generic equivalents promptly. Also, the quality of these counterparts is up to the mark which means that the drugs seem quite similar to the active compounds that are created by the original drug maker and different drug versions are identical to the versions of other generic producers. 

2. Lower costs

Teva’s generic products are cheaper than their original versions because generic manufacturers do not have to take into consideration the research and development costs. Advertising and marketing costs as well as costs associated with costly clinical trials are not to be taken care of by generic manufacturers. This is why Teva Pharmaceutical Industries has been successful in keeping the costs of its generic products low. It also practices economies of scale where it produces huge quantities of generic drugs that ultimately reduce the cost of production. As a result of the lower costs, they can be sold at a relatively lower price as compared to branded products. This results in Terra Pharmaceuticals providing access to people the medicines they need. 

3. Diverse product portfolio

Being the largest generic drug manufacturer in the world, Teva provides a wide range of products that are distinct from others. Through the differentiation strategy, its products lie within a wide range of product portfolios. The products can be listed in the category of commodity generics, niche generics, biosimilars, etc.   

2. Evaluate Teva's resources. Which are its most valuable ones?

Teva Pharmaceutical’s resources are allocated based on innovative as well as generics areas. For example, there are less risky generic drugs and high potential innovative drugs.

1. Capital

Capital is one of the key resources used by Teva Pharmaceuticals to introduce new drugs to the market. To practice, the research and development of each drug take billions of dollars. For example, the development of Copaxone required approximately one-sixth $1 billion and launch it in the market. With enough capital, Teva has been able to employ several talented and experienced individuals in different departments of sales, marketing, research, development, etc. to ensure a smooth workflow.